Unpacking product subscription models
Subscription services have been a part of consumers’ lives for decades, typically through print, such as newspapers and magazines, and more recently with media and entertainment services like Netflix and Spotify. In the last decade what is available to order on a subscription basis has begun to widen. Consumers can get everything from clothes to personal care, from toys to food.
Product subscriptions differ from more traditional versions in that the consumer is subscribed to a service that sends them physical products, rather than content, such as music and films. The market is sizeable with nearly one in five consumers in the US saying they have a tried a product subscription.
In the world of consumer products there are two distinct types of subscriptions that bring products to your door. The first is box subscriptions, which allow users to try a variety of products curated and shipped to their door. The second is replenishment, which as the name suggests, is the restocking of essentials such as household supplies and personal care products aimed at offering convenience.
While there are many factors which contribute to the ups and downs of product subscriptions, this paper focuses on the customer as growing a strong and steady consumer base has been a challenge for many replenishment and box subscriptions. Ipsos research found that over 55% of people are aware of these services and are interested in them, but barriers to adoption exist. This paper looks at these barriers and argues addressing them could put product subscriptions on a steady growth path.
